WESTERN EUROPE: Game Without Chips

At noontime one day last week a platoon of brass-buttoned, bowler-and top-hatted runners fanned out from the Bank of England through the rabbit-warren streets of the City of London. When their message reached the stock exchange, there was stunned silence, and for almost half an hour trading was all but suspended. By government decree, the Bank of England interest rate (on which most other British interest rates depend) had been sharply raised from 5% to 7%—its highest level since 1920.

This was Britain's emphatic answer to an emphatic crisis in Western Europe's currency, involving Britain, France and West Germany....

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